I am on currently on Windows Vista but I'm thinking of downgrading to Windows XP in the hopes that my PC will run a bit faster. will I see a performance benefit from the downgrade? Also, will I still be able to run the games I like and will there be any improvement in battery life for my laptop?
Faster is subjective, from doing benchmarks the answer is yes but only marginal and in some cases not noticeable. Other technologies in Vista such as SuperFetch actually speed up programs that you use regularly.
Games - You will not be able to run the latest DirectX games in XP, however, many games support this in addition to older versions, so you shouldn't really loose out.
Battery - Answer is no. There are many optimisations in Vista that prolong battery life (In particular after Service Pack 1) - I cannot find the article which lists all the improvements, but I found this overview which says about battery life several times.
Personally, if your laptop is a single core Celeron, Older generation Pentium, less than 2GB of memory or has a 4800RPM hard drive, I would use XP. Anything better - stick with Vista.